CAPSIM – Common Agricultural Policy Simulation Model
Funding
European Commission, Eurostat, Contract no. 2001 63500001
Duration
March 2001 – October 2003
Objectives
- Robust and quick impact analyses for CAP scenarios
- in a user friendly manner
- with policy relevant results
- and disaggregate coverage of items and individual EU Member States
Methodology
General:
Calibrated, comparative static, partial equilibrium model
Supply side
- Behavioural functions for activity levels and input demands
- Yields are assumed exogenous
- Normalised quadratic functional form
- Balances on land, male and female calves, and energy and protein
Demand side
Calibrated GL demand system
Processing
- NQ function of net revenues
- or fixed margin assumption if not covered explicitly
Different trade regimes
- Exogenous trade volumes,
- exogenous international prices, or
- net trade as function of EU border prices.
Policy instruments
- Border measures: tariffs (specific or ad valorem), flexible levies / variable export restitutions, WTO constraints on subsidized exports
- Domestic support: intervention, subsidies, CAP premiums
- Set aside: exogenous or based on an elasticity with respect to the obligatory set aside rate.
- Dairy Quota: implemented as quota on total production with shadow revenue.
- A, B sugar quotas: incentive revenue approach
Data sources
- Eurostat gave data on market balances (ZPA1), economic accounts values (COSA) and a number of EU producer prices (PRAG), if they cannot be derived as unit values.
- Other sources were DG Agri, FAO, FAPRI, USDA, ILO, national statistical agencies
- Completeness and consistency has been achieved in a joint effort with the CAPRI team ( COCO module)
Results
- Activity levels, market balances and income (NVAF) in agriculture per EU Member state
- Consumer welfare: equivalent variation.
- Processing industry profit (change)
- Simplified estimate of FEOGA impacts
Improvements over predecessor MFSS99
Database
- Update of base year to 1997/99 and to revised Economic Accounts on Agriculture (EAA) definitions
- Competeness and consistency with the COCO module
- Revision of consumer prices and feed prices
- Distinction of 4 milk products (butter, skimmed milk powder, cheese and other milk products)
Behavioural functions
- Globally well behaved rather than double log.
- Innovative approach to incorporate balances on energy and protein.
Additional components
- Complete welfare analysis
- Rather Detailed incorporation of Sugar CMO
- EU border prices were rendered endogenous
- Link to IDARA model to cover Candidate Countries in ad hoc manner
User-friendliness
- Options for exogenous input to the reference run have been created which are automatically taken over in policy simulations.
- Interplay with the “GSE” user interface developed in the LEI (Dol / Bouma)
Additional information:
- Witzke, H.P., Zintl, A. (2005): CAPSIM - Complete documentation, Final Report to Eurostat, Bonn.
- Witzke, H.P. (2003): CAPSIM – An Overview (ppt).
Last updated: Monday, 20-Oct-2008 11:53:35 CEST